Greece is several economic tragedies rolled into one

Written by

Share

Written by

Over the past decade, Greece has experienced an economic downturn unlike any other in recent history. The ugly combination of the global financial crisis, fiscal irresponsibility, and political instability has savaged almost every aspect of the Greek economy.

There is no obvious historical precedent to put Greece’s dismal situation in context. Rather, it is easier to compare Greece’s lost decade with a variety of catastrophes in the past. The following four charts put Greece’s economic plight in historical context.

A GDP decline akin to the US Great Depression (and then some)

The Great Depression was the worst economic disaster in American history. In 1933, at the nadir of the depression, US GDP per capita had fallen 31% from 1929. Greece’s 25% decline in GDP per capita between 2007 and 2014 was nearly as bad, and the subsequent recovery has not been as rapid. The US economy perked up after 1933; Greece remains stagnant.

A spike in unemployment worse than the UK’s “winter of discontent”

The 1980s were a tough time for workers in the UK. The unemployment rate more than doubled, from 5.3% in 1979 to 11.5% in 1986, with widespread strikes and unrest in response to harsh austerity measures by prime minister Margaret Thatcher. But the worst of the Thatcher-era labor market, popularly known as the “winter of discontent,” has nothing on modern-day Greece. The unemployment rate in Greece tripled between 2006 and 2013, from 9% to 27.5%.

A stock market decline more severe than Japan in the 1990s

Japan’s enormous asset bubble of the 1980s popped spectacularly in late 1989. The Greek stock market selloff was even more brutal. Today, Greece’s benchmark index is worth 70% less than it was in 2006; over a similar period in 1990s Japan, the market had recovered much more of its value.

A banking system more beleaguered than in worn-torn Ukraine

Since 2013, Ukraine has been in acute financial crisis, riven by political instability and reeling from the annexation of Crimea as well as ongoing fighting with pro-Russian separatists elsewhere in the east of the country. Yet even in Ukraine’s devastated economy, the share of nonperforming loans on banks’ balance sheets have not reached the same heights as in Greece. In 2016, more than a third of loans on Greek banks’ books were past due.